Launched in October 2008 and based in Sweden, Spotify now offers its music streaming and subscription services worldwide, including in the United States. Since its launch, the service has been a private company, not revealing revenue figures. A new report claims that Spotify could soon join Pandora as a public company.
Reported by Quartz, “sources familiar with the process” say that Spotify will hold formal meetings as early as April in anticipation of the company’s public offering, which could happen this fall. Adding fuel to the fire, Spotify took out a $200 million credit line from lenders, which include Morgan Stanley, Deutsche Bank, and Goldman Sachs earlier in March.
In recent years, a number of Internet-based companies have flocked Wall Street to get the big bucks an initial public offering nets. Facebook had initial struggles, though share prices are now well above what the company initially offered. Zynga, meanwhile, floundered even before going public, with the company yet to recover from its immense dropoff. More recently, King went public and was met with decreasing share prices as soon as the bell rung.
However, Quartz’s sources are confident in Spotify’s success in Wall Street, due in large part to the company’s business model. Unlike Pandora, which earned most of its earnings from advertising, the majority of Spotify’s earnings come from subscriptions.
While you can choose to use Spotify for free and listen to ads, the service also has a Premium version, which offers the ability to play songs, regardless of device, for $10 a month. Most recently, Spotify began to offer college students half-off the service’s Premium price tag for one year.
Image courtesy of Quartz